SUMMARY
Fraud risk assessment remains a demanding and complex task for auditors (Allen et al. 2006; Wilks and Zimbelman 2004). Our research context is planning of an audit when an accounting fraud has been committed and management has provided a fraudulent explanation for better-than-expected profitability. We test whether a business model versus a chronological presentation of client strategic and business process evidence will result in more precise expectations of a client's nonfraudulent revenue and higher assessments of a seeded fraud. When management provided a fraudulent explanation, the users of the business model presentation achieved better judgments by making more valid use of nonfinancial performance measures relative to fraudulent assertions made by management. When management did not provide a fraudulent explanation, there were no differences in judgment performance given the two evidence presentations.
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